Suddenly, everyone goes crazy over cryptography, and since bitcoin futures are becoming reality, a merchant has a way to capitalize on the action.
As the bitcoin exchange race continues, Khouw expects these shares to continue to rise, and offered an options strategy to enter the boom.
One way to play the next release of bitcoin futures is by selling put options on the CME, he said. Khouw pointed out that this type of commercial structure allows one to buy an action at a lower price than where the stock is currently being negotiated.
"If you look at CME, obviously the action has been very successful here, and from where it really originated, in my opinion, it's close to the $ 140 level," Khouw added. "When you sell a put, you are selling to another person the right to sell you an action at the price of the shares," he explained.
Another reason to sell a put according to Khouw is if the options prices are expensive He noted that the price of the CME options has skyrocketed recently as the bitcoin price increased. "We want to capitalize on the fact that the options are high and we have the opportunity to buy shares [CME] at a lower price," Khouw said.
Specifically, Khouw focused on the January strike of 145 puts for $ 4.50. Because Khouw is selling a put, he is willing to increase the stock to $ 145, but he will benefit if the CME stock closes at $ 140.50 or higher by expiration in January.
Khouw will face losses if the stock closes below $ 140.50 before the expiration date. "The good thing about this operation is that you get benefits if you stay [at $140.50] or go further and even if it decreases a bit," he said.
CME shares were trading in the $ 152 range at noon on Monday.